http://247wallst.com/2009/11/11/apple-aapl-moves-to-conquer-its-next-frontier/

The Holy Grail of consumer electronics is still a smashing success in the video game industry. Tens and tens of millions of Sony (NYSE:SNE) PS2s and PS3s were sold over the last decade. Microsoft (NASDAQ:MSFT) has turned its game console business into a real success. Nintendo has become the darling of the Japanese consumer electronics market because of huge sales of its portable DS and Wii consoles.

Apple (NASDAQ:AAPL) has done remarkably well in the computer, handset, and multimedia player sectors of electronics, but its has little or no place in the gaming industry.

Steve Jobs means to upgrade his status in the video game field. According to The Wall Street Journal, “Apple has made clear that it intends to go after Nintendo’s turf.” Among the Big Three members of the game industry, Nintendo is by far the most successful. The company is expected to sell 30 million of its DS units this year.

Analysts expect Apple to be succesful as it moves rapidly into video games. Research firm DFC predicts that revenue from Apple game sales will rise  from $46 million in 2008 to more than $2.8 billion in 2014. The forecast for 2014 seems improbably high. And, forecasts of consumer electronics activity five years from now are bound to be little more than guesses.

Apple does have some significant advantages as it moves into games inclusing its brand. The Apple name certainly helped adoption of the iPhone. A company that did not have the Mac and iPod as established products would have had a much harder time breaking into the handset field.

Apple also has the edge in its success with product design. It would be nearly impossible to name a company that has come to market with more electronics product that have become instantly popular in part because they were so well suited to consumer tastes.

Apple’s last and not insignificant advantage is its growing relationship with cellular carriers around the world, something that Nintendo lacks. Multi-player games can work on wireless 3G networks giving them many of the capabilities of larger consoles hooked up to landline broadband. 3G systems also make the download of new games relatively easy.

Apple is moving into the video game industry and it is likely that the companies already in the sector will have the same trouble handset firms had with the introduction of the iPhone.

Douglas A. McIntyre

_____________________________________________________________________

So, what do you guys think of those analysts' expectations?  Apple has the money to put a good effort in, but that's one more giant in an already overcrowded field.

They'll fail. No one will accept Apple in the game industry. Sony and Xbox fans won't buy their trash and Nintendo has the casuals on lockdown.

$46 million in 2008 => $2.8 billion in 2014? Well, that's a huge leap. FYI DS generated ~$4 billion in 2008. But they're not entirely comparable due to different business models, so direct comparison of SW\HW numbers is useless, I guees.

Apple sure is successful in the mobile sector, and they have a potential to translate it into success in the gaming segment of that market. Nintendo sure would like to keep status quo, and they have an ability to differentiate oneself from Apple, since they're the biggest game publisher with a lot of 10M+ sellers on DS. The future will tell.

@Lurker - I hope so too, companies should be restricted to one monopoly only lmao. Zero would be better, but c'est la vie.

They may make a pretty penny selling stuff on the app store and it will be very profitable. I doubt this will take the attention of regular gamers so much as people bored on their i-whatever. Plus with no in house development studios and the woes of getting your app noticed on the app store I think Nintendo is safe for now.

On the other hand if they launch a serious initiative give devs and games advertising and prominence on the store and start offering money to get Nintendo style shovelware also on the i-whatevers then maybe so.(if we see something like flipnote studio and petz clones coming) plus advertising i think Apple could actually hurt them badly.  

I just don't see them doing see the passion in apple gaming. Maybe they will show me.

So far they make more money then EA in terms of gaming. They're not competing for the hardcore gamer market they're competing for the casual gamer who plays stuff like Wii Fit.

The Pippin 2 is on the horizon

They make all their money on little $5 phone games. The real game industry is another beast.

Lol, an Apple console would be equivalent to the Wii in power and capabilities but cost $300 more..... for the unique OS experience on that console....

What made you think there's a 'real' game industry? Do you suppose that Apple gaming isn't 'real'? What makes it 'real'?

If they'll able to accumulate few billions in revenue per year that's pretty much real by my standards.